Q1 results April 2011 Jørgen Bredesen, CEO Björn Wigström, CFO

Transcription

1 Q1 results April 2011 Jørgen Bredesen, CEO Björn Wigström, CFO

2 Profitability recovering Financial highlights Order backlog increased by 4.3% vs Q Activity level recovering, revenue up by 4.5% vs Q Operating profit improved to NOK 11.1 million and operating margin was 2.6% Working capital increased due to component situation and higher activity level 2

3 Component situation still challenging Operational highlights Component situation leading to pressure on delivery precision and manufacturing efficiency across all operations Restructuring plan for Kitron Sweden finalized Establishment of new entities in USA and China on track but transfer schedule and start up is challenging Several smaller contracts secured in Germany 3

4 Restructuring of Kitron Sweden Decission taken to restructure Kitron Sweden with the aim to increase competitiveness and improve profitability: Key points in the plan: Downsize Karlskoga to a manufacturing site for defence and interface for medical clients with lower cost production. Maintain competence to provide technical services Merge the two Swedish entities operationally and share all administrative and back office functions Current status: Negotiation with labour unions completed downsizing by about 30% to 66 empl. Transfer plan agreed Merger of Swedish operation scheduled in Q2 Full financial impact of restructuring was booked in the 2010 accounts 4

5 Major new orders in Q1 LOI with Energy/Telecoms customer worth NOK 400 million Including deliveries until the end of 2014 given competitive pricing New five year manufacturing agreement with Kongsberg Deliveries of electronics to the NSM (Naval Strike Missile) first delivery in 2012 amounting to NOK 15 million. LOI to co-operate in the first phase of the manufacturing of the Joint Strike Missile New Medical equipment orders of about NOK 35 million Offshore orders of about NOK 180 million (Reported in Q presentation) Deliveries in 2011 at NOK 32 million Estimated total deliveries in 2012 are about NOK 148 million 5

6 Financial statements Q1 2011

7 Positive revenue development Revenue Group Revenue at NOK 430 million, a growth of 4.5% vs Q Q1 change by market segment: Q vs Q Energy/Telecoms -18.1% Defence/Aerospace -4.8% Industry 41.3% Medical equipment 2.2% Offshore/Marine 42.2% Revenue by market segment Total revenue NOK 430 million Energy/Telecoms declines due to phase out of a specific customer Short term dip in Defence/Aerospace Strong development in Industry segment particularly due to recovery in Sweden Mixed trend in Medical equipment Offshore activity increasing with growth in oil price 7

8 Revenue by country Revenue by country * Mixed trend: Norway 7.2% higher Growth driven by strong trend in Industry and Offshore, Medical Equipment while Energy / Telecoms is lower NOK million Sweden 5.2% lower Downturn related to Medical Equipment while other segments show growth Revenue by country Total revenue NOK 430 million Lithuania 9% higher Strong development across the business * Before group entities and eliminations 8

9 Higher profit as markets recover Operating profit NOK 11.1 million (NOK 5.9 million) Operating margin was 2.6% Improved profitability driven by the recovering top line and stronger contribution margin Several factors affect profitability: Component shortage continue to have negative impact on revenue and manufacturing efficiency New manufacturing units generate negative result during start up phase Operating profit Group Operating margin Group 9

10 Profit by country Operating profit by country * Performance improving Q profit in Norway boosted by NOK 10 million pension adjustment. Swedish operation turned around to profitability following restructuring Operating margin in Lithuania above 10% Operating margin by country New manufacturing units (CN, US and GE) booked a loss of about NOK 6.5 million for Q1 in line with start up plans. * Before group entities and eliminations 10

11 Working capital increasing Operating cash flow Group Cash flow was negative by NOK 38.3 million (negative NOK 31.7 million) mainly due to working capital build up Working capital remains at a higher level: Increasing activity level/revenue is driving working capital needs Lack of components requires higher safety stock/inventory and lead to higher work in progress Net working capital Group 11

12 Comfortable level of equity Equity of NOK million (443.5 million) and equity ratio of 40.6% (45.7%) Equity Still among the strongest in the EMS industry Equity ratio 45.7% 44.1% 44.1% 41.4% 40.6% 12

13 Market development

14 Market recovering Defence/Aerospace longer term outlook remains promising but lower demand in the short term (2011) Energy/Telecoms loss of major account with effect from Q2 2011, partly offset by strong demand from other customers Industry firm recovery based on development in Swedish market Medical equipment mixed trend by customer but overall segment fundamentals remains positive Offshore/Marine rebound under way following higher oil prices 14

15 Order backlog Group Order backlog trend Order backlog at NOK million (NOK million) High order backlog in Q2-Q reflect long lead time orders Backlog in Energy/Telecoms lower due to loss of major account Overall positive development in other segments Order backlog Segment Definition of order backlog includes firm orders and four month customer forecast 15

16 Expanding market coverage Update on establishment of new entities overall implementation on track: German operation fully integrated and operational Several orders booked in Q1 China factory operational Small volume production started SMT line to be operational in Q3 US establishment in progress Certification process ongoing Volume manufacturing to start in Q2 16

17 Outlook

18 Outlook Market recovery expected to continue Component shortage holding back growth Continued focus on operational improvements (supply chain management, ERP, indirect cost etc.) Restructure Swedish operations throughout 2011 Financial impact booked in 2010 Establishment of new units (USA, China and Germany) ongoing Revenue expected to be in line with 2010 but profitability is expected to improve 18

19 19 Thank you!